Bills rise by up to £131 a year as energy firms pull best deals

HOUSEHOLDS face higher bills this winter as energy firms withdraw their cheapest deals.

A rise in wholesale gas and electricity prices was blamed yesterday for the price pressure. NPower has withdrawn its lowest tariff and replaced it with one that is £91 more expensive at around £877 a year. A fixed-rate deal with Ovo has vanished to be replaced with one that is £94 costlier, according to research from the price comparison site uSwitch.

And Co-operative Energy has ditched its cheapest deal, swapping it for one that is £131 a year higher.

Consumer groups have long complained of profiteering by suppliers. Last year, and in 2014, firms passed on only a tiny fraction of a fall of more than 30 per cent in wholesale charges.

This failure triggered criticism from the industry watchdog, Ofgem, and a formal investigation by the Competition and Markets Authority.

The CMA found that a failure of competition meant families and businesses were paying £1.7billion a year more than necessary for heat and light.

Its remedy included the introduction of a cap on the amount that firms can charge to customers with pre- payment meters. Only small numbers of households use these however.

The CMA also has plans to allow energy companies to let loose a tidal wave of junk mail offers promoting their deals. Consumer groups fear the measures will have little impact. The uSwitch study found that many companies did cut tariffs between the summer of 2015 and 2016. But it seems this pattern is now going into reverse.

Claire Osborne, the firm’s energy spokesman, said: ‘Rising wholesale costs have forced some suppliers to up the price of their best deals.

‘There are still many competitive tariffs available on the market – for now at least – but they may become more expensive if wholesale prices continue to rise. Consumers who are concerned about their energy bills going up, especially as we head toward winter, should shop around to see whether they can switch.’

Energy UK, which speaks for suppliers, said 3.3million households have switched their electricity supplier this year.

Lawrence Slade, chief executive of Energy UK, said: ‘The energy market is more competitive than it has ever been.’ MoneyMail reported yesterday that four in ten energy customers are blocked from getting their supplier’s cheapest deal.

EDF Energy, Eon and SSE are all offering cheap tariffs to new customers.

But households already with these suppliers will pay up to £289 a year over the odds if they stay. Previously, suppliers had to make all deals available to everyone.

But the CMA review has given them the green light to offer exclusive packages.